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Documenting Business Expenses – Part 3: Travel

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Services for Real Estate Pros with Charles G. Perkins, CPA

Documenting Business Expenses – Part 3:  Travel

 

Travel expenses can be deducted when they satisfy a legitimate business purpose and meet the ordinary and necessary test.

 

Legitimate Business Purposes

The type of business you are in makes a difference.  Here is a short list of purposes that may be ordinary and necessary in your business.

 

   1)      Meeting with existing and potential customers, suppliers or other business contacts

   2)      Continuing education, association meetings, conferences, trade shows and other trade activities

   3)      Meeting to discuss potential investment deals

   4)      Speaking engagements

   5)      Attending shareholder meetings

   6)      Meeting the publisher of your book

   7)      Taking photos for your marketing pieces

 

 

Documenting your Travel

You will want to keep copies of receipts, but I generally will keep a file as well.  In the file I keep copies of meeting outlines, agenda lists, notes, a log of hotel, rental car, meals and entertainment used during the trip. 

 

I use this file also to help me decide if this trip might be worth doing again. 

 

Supporting Evidence

 

You also will need to keep documentary evidence of these business meals and entertainment expenses.  Adequate receipts include:

  • Canceled checks
  • Credit card slip
  • Cash register receipts
  • Credit card statements

 

More information on the IRS website

http://www.irs.gov/newsroom/article/0,,id=167363,00.html

 

Posted by

Charles G. Perkins, CPA

Servings Small Businesses in the Puget Sound Area

 

Cell: (206) 422-5504

Office: (206) 228-1988

email: charles@charlesperkinscpa.com

website: www.charlesperkinscpa.com

 

Charles G. Perkins, CPAI look forward to meeting your business and tax needs.  I also have many partners in business that can meet your other business needs.  These include contractors, insurance agents, investment advisers, financial planners, mortgage advisers, and many others.

Comments (7)

Carra Riley & Declan Kenyon
Brokers Guild Cherry Creek Ltd - Westminster, CO
Helping people Transition at all ages!

Charles,

You are helping keep us on the straight and narrow!  Good to be able to know exactly what we need to keep out of trouble.

Thanks for stopping by the Cosmic Cow Pie.

Sep 18, 2009 01:29 PM
Charles Perkins
Charles G. Perkins, CPA - Burien, WA

Sometimes it's a windy road we travel.  If we can document it well and show there is a legitimate business purpose we may be good.  Have a Great Weekend!

Sep 18, 2009 01:50 PM
Teresa Berry
Seattle, WA

Charles what great information to share - useful, timely and easy to understand. you go! :)

Sep 18, 2009 06:01 PM
Charles Perkins
Charles G. Perkins, CPA - Burien, WA

Thanks Teresa,

It's my desire to try to keep the community aware of important tax and tax planning issues.

Sep 18, 2009 06:11 PM
Terry Chenier
Homelife Glenayre Realty - Mission, BC

Charles,

Add to that list; collect as many business cards as you can from people you contact while on business.

Sep 19, 2009 05:21 PM
Charles Perkins
Charles G. Perkins, CPA - Burien, WA

Terry

Collecting business cards is a great way document the business purpose of a trip.  It also helps build contacts that can generate more business leads.   Thanks for sharing.

Sep 20, 2009 05:10 AM
Theodora Wu
TJ Investments - Burien, WA

Thanks for the reminder.

Sep 25, 2009 04:52 PM